AQA A-level Economics new 7136 - 06, 13 & 19 Jun 2017 [Exam Discussion]

Hey , do you include application in questions to do with market structures because i dont know how i would link it in with my answer. Also when talking about the market mechanism is it ok to use a diagram thats already in excess supply?

Wow! I'm sure you are well prepared Where do you want to go?

I guess it depends on the question.... if there's a question about supermarkets for example, then you would draw an oligopoly diagram, and that would be the application.

This also depends on the question too. Excess supply would mean there is a minimum price, but what do you mean by the market mechanism? Would you then want to shift supply/demand, with the excess supply already there?

can a market not already a have excess supply or excess demand e.g. the housing market currently has excess demand.

When discussing oligopoly is it best to use a monopoly diagram and say oligopolies have a degree of monopoly power or is there a better, more advanced diagram i should use?

can someone please please explain to me how to argue for the free market solving market failures in context based questions? how can signalling incentives and rationing solve market failures?

Exeter, what about you?

A good way to argue this is to use the example of the NHS. The decision to nationalise the NHS and provide it free of charge has meant that the NHS is over consumed. For example as soon as some people start to feel a little unwell or catch a cold they book a gp appointment. As a result people who have genuinely serious conditions are put further back on the waiting list. Furthermore if people miss their appointment and suffer no consequence then this will also lead to increased waiting times. If left to the free market a person would pay directly for the appointment and therefore would be more likely to only make an appointment if they really needed to. Therefore the over consumption of the NHS will be reduced.

Anyone have any general evaluation points they'd like to share? I wrote some down but they are lost in my room somewhere. For things like intervention, I might use behavioural econ to suggest why it may not change their behaviour[/QU

When evaluating the trickle down effect (an argument for low taxes) make sure to mention that wealthy people have a very large marginal propensity to save. This is due to the fact that even income has diminishing marginal utility. An extra £1000 per year for someone who earns over £200,000 is not going to give them much satisfaction and are likely to save it. Someone who earns £10,000 is much more likely to spend that extra £1000 on goods and services as they gain a much larger level of satisfaction. If the rich man does decide to spend it he will likely use it to gain wealth for example buying a house. This will create more inequality as income can be earned from rent and reduces the availability of houses available to low earners as supply for houses is inelastic in the short run.

Anyone have any general evaluation points they'd like to share? I wrote some down but they are lost in my room somewhere. For things like intervention, I might use behavioural econ to suggest why it may not change their behaviour

Government failure - admin costs, opportunity costs, regulatory capture, unintended consequences, black market, inefficiency, distort price signals, LR vs SR etc...

Here's a question for you all:

In the specimen there's a 25 question about "Evaluate the view that 'inequality is good for us all'" or something like that.

With these sorts of questions, what do I do in terms of diagrams? My usual exam structure is: Definitions, first point (with diagram which I explain), drawback of first point. Second point.... etc etc. What kind of diagrams do I incorporate into this sort of question? It doesn't seem immediately obvious or maybe I'm just missing the obvious lol

Any help would be appreciated!

start by defining inequality,

Inequality acts as an incentive to strive for high pay
You could incorporate a wage diagram showing a more inelastic supply of workers earning higher wages (and compare to a less elastic) because they have more skills, are more motivated to learn, work hard to always get the next highest paid job. This leads to wage inequality where some workers earn more than others, but its not necessarily a bad thing as higher wages may mean higher productivity. You would evaluate this point, how wage inequality raises equity issues etc

Ahh, I see. So basically with these inequality questions it really becomes an inequality/labour market essay when you start going into wage inequality? I guess that seems like the easiest way to give yourself stuff to talk about? I was feeling a bit intimidated at the prospect of having to write a whole 25 marker with no (or minimal) use of diagrams lol

Thanks for your help!

That's just one of the points I would go for as a point
You can talk about the effects on unemployment (a cause of inequality) and how this clearly isn't good for us all

Another easy point to explain why inequality isn't a good thing is because poorer families tend to under consume merit goods, market failure so that leads on to good explanation points, also read the data response to see what else was mentioned I can't remember myself